India Beer Sales Jump 17%

Beer sales in India have surged 17% in the June quarter, outpacing spirits which grew only 2%, according to excise data. This growth is attributed to favourable excise policy interventions in many states, which have made spirits more expensive compared to beer.

The growth in beer sales is led by states such as Maharashtra and Karnataka, which have seen significant increases in beer sales. In Maharashtra, beer sales have expanded 42%, while in Karnataka, they have expanded 35%. These states, along with Odisha and West Bengal, have raised taxes on Indian-made foreign liquor (IMFL), making spirits more expensive compared to beer.

In contrast, spirits volumes climbed only 2% in the June quarter, with whisky sales declining 1%. Whisky makes up nearly two-thirds of the spirits market, and its decline has been due to weakened demand for mass-priced brands. Brandy and vodka sales expanded, but were not enough to offset the decline in whisky.

## What changed The slowdown in spirits sales comes as state-level tax changes have made spirits more expensive compared to beer. This has led to a shift in consumer preference towards beer, which has been encouraged by favourable excise policy interventions in many states.

## Why it matters The growth in beer sales is significant, as it indicates a shift in consumer preference towards milder alcoholic beverages. This shift is expected to continue, with the Brewers Association of India predicting that the market will start picking up from September as temporary factors ease. The strong growth in beer sales also comes despite the industry facing challenges, and is a positive sign for the sector.

The growth in beer sales is also expected to have a positive impact on the economy, as it will lead to increased revenue for states and create jobs in the brewing industry. With the peak season for beer having been good for the industry, and July trends showing no signs of slowing down, the future looks bright for beer sales in India.